The best investment stock that distributes profits in 2023
Investing in the best dividend-paying investment stock in Saudi Arabia is the easiest way to build a good passive income source and grow your money. Now here’s what you need to know.
Dividend shares are shares that give their holders the right to receive regular cash distributions from the dividend. Investing in the best dividend-paying investment stock can be a great profit opportunity for people who want to secure some good, periodic passive income and build their bank account.
The members of the Board of Directors take upon themselves the task of determining the percentage of profits that will be distributed in the form of cash payments to the preferred shareholders periodically, in order to reward them for investing their money in the growth and expansion of their project. Not all companies distribute profits to their shareholders, especially in their initial growth stages, as they prefer to invest these profits in supporting their expansion and business development.
In this article, we will focus mainly on the Saudi market and learn about the best investment stock that pays dividends.
What is the best dividend stock investment?
Instead of providing a single answer to this complex question, we preferred to provide you with a list of the most important dividend-distributing investment shares so that you can choose the most appropriate and best one in a manner commensurate with your financial ambition and investment situation. Let’s get to know it now.
The best shares of dividend-distributing companies in Saudi Arabia
Aramco dividend stock
Aramco is a Saudi public oil and natural gas company headquartered in Dhahran. Aramco is one of the largest companies in the world by revenue, and it has the second largest proven reserves of crude oil in the world at over 270 billion barrels (43 billion cubic metres) and the largest daily oil production among all oil producing companies in the world.
The company decided to offer its shares for trading on December 11, 2019, and Aramco’s share rose to 35.2 Saudi riyals, giving it a market value of about $1.88 trillion, exceeding $2 trillion on the second day of trading. Then in 2020, Saudi Aramco was ranked as the fifth largest public company in the world.
The stock market is dominated by oil giant Aramco, with an estimated market capitalization of more than 7 trillion Saudi riyals ($1.86 trillion) in market capitalization. This company paid in the last months of 2021 SAR 1.05 per share to each shareholder. This has brought the subsequent dividend payout to close to 4 percent on the share price of SAR35. Supported by the recovery in crude oil prices, the giant oil company’s net profit doubled during the first nine months compared to the same period last year, to reach 279 billion riyals.
Al-Rajhi dividend distribution
Al Rajhi Bank, formerly known as Al Rajhi Banking and Investment Bank, is the largest Islamic bank in the world in terms of capital based on 2015 data. This bank is a major investor in the business of Saudi Arabia and is one of the largest joint stock companies in the Kingdom with more than 330.5 billion Saudi riyals In assets under management and more than 600 subsidiaries. The main office of this bank is located in Riyadh, with six regional offices. Al Rajhi Bank also has branches in Kuwait, Jordan, Malaysia and Syria.
Al Rajhi Bank, one of the world’s 15 largest banks by market capitalization, paid 3.5 billion Saudi riyals – or 1.4 Saudi riyals per share – in dividends for the first half of 2021 after the kingdom’s banking leaders – Al Rajhi Bank, Saudi National Bank and Bank Riyadh, and The Saudi British Bank – for increasing their dividends.
SABIC Basic Industries dividend stock
SABIC is a state-owned Saudi chemical manufacturer in which Aramco owns 70 percent of the shares. SABIC specializes in the manufacture of petrochemicals and chemicals, industrial polymers, fertilizers, and minerals. It is the second largest public company in the Middle East and Saudi Arabia as listed on Tadawul. In 2017, SABIC ranked fourth in the world among chemical companies. By the end of 2018, SABIC was the 281st company in the world.
The company’s sales revenues in 2014 amounted to approximately $50.4 billion and $6.7 billion in profits, with assets amounting to $90.4 billion.
The chemical manufacturer Saudi Basic Industries Corporation (SABIC), known as SABIC, with a value of more than 341 billion riyals, paid 6.75 billion riyals — 2.25 riyals per share — as dividends to shareholders in the second half of 2021.
The share of the National Bank of Saudi Arabia distributing profits
The Saudi National Bank is the national bank of the Kingdom of Saudi Arabia, which is headquartered in the capital, Riyadh. The National Bank of Saudi Arabia was established in December 1953 under the name of the National Commercial Bank. This bank has emerged as a banking champion after completing one of the largest mergers in the region between the National Commercial Bank and Samba Financial Group. The National Bank now has subsidiaries and affiliates in more than 8 countries around the world and is overwhelmingly owned by the Saudi government represented by the Public Investment Fund and the General Organization for Social Insurance.
The National Bank of Saudi Arabia, the second largest Saudi bank, distributed 0.65 riyals per share in the first half of 2021. Compared to its annual net dividend payout per share of 0.8 riyals per share for the whole of 2020, its semi-annual payment was up 62.5 percent year-on-year.
Shares of Saudi Telecom Company
STC is the premier Saudi digital enabler of telecom services in the Kingdom of Saudi Arabia, and among the most important operators in the Middle East. The company provides terrestrial, fixed and mobile infrastructure services, data services, mobile services, broadband and cloud computing. The company has invested in next-generation networks and has upgraded to a packet-based architecture where information, services and media can be transmitted over the network.
The Saudi Telecom Company, on the other hand, distributed quarterly dividends totaling 3 riyals per share in the first quarters of 2021, in line with last year’s rate. This resulted in an additional return of 3.6 percent on a share price of SAR 110.8. Six-year data by the telecom operator revealed a stable trend in terms of annual net earnings per share, ranging between 4 and 6 Saudi riyals since 2016.
Shares of the Saudi Electricity Company
The Saudi Electricity Company monopolizes the generation, transmission and distribution of electric power in the Kingdom of Saudi Arabia through 45 power generation stations in the country. In 2019, Forbes magazine ranked this company, which stands for SEC, as the 5th largest company in the Kingdom and 578th globally with total annual sales of $17.1 billion. The company was established in 2000 by order of the Council of Ministers by merging the regional electricity companies present in the central, eastern, western and southern regions into one joint stock company. In 2009, the Electricity and Cogeneration Regulatory Authority (ECRA) announced its intention to split the company into four separate generation and transmission and distribution companies to encourage competition in the domestic utility sector.
Since 2005, the Saudi Electricity Company has provided a safe haven for dividend payments to shareholders, offering regular annual payments of SAR 0.7 per share even under high volatility. In 2021, the dividend yield is 3 percent on a share price of SAR 110.
Ma’aden shares distributed dividends
Ma’aden (Saudi Arabian Mining Company) is a Saudi state-owned mining company headquartered in Riyadh. Ma’aden was established as a Saudi joint stock company on March 23, 1997 with the aim of facilitating the development of mineral resources in the Kingdom of Saudi Arabia. The Saudi government still owns 50% of the shares of this company while the remaining 50% is listed on the Tadawul Stock Exchange, and it is considered the largest mining company in the Kingdom of Saudi Arabia.
Arabian Mining Company, the largest mining company in the Gulf, has suspended dividend payments to fund growth since its listing in 2008. The company posted a profit of 3.14 billion Saudi riyals in the first nine months of this year, swinging from a net loss of 781 million riyals for the same period last year. .
Shares of SABIC Agro-Nutrients Company
SABIC Agro-Nutrients Company (formerly Saudi Arabian Fertilizer Company “SAFCO”) is the first petrochemical company in the Kingdom of Saudi Arabia, which was established by Royal Decree No. M / 13 dated 11-05-1385 AH and 1965 AD as a joint venture between the Saudi government and citizens of the Kingdom of Saudi Arabia with a capital 100 million riyals. The company’s capital has been increased several times to reach 4,760,354,040 million Saudi riyals and a total of 476,035,404 shares at a price of 10 Saudi riyals per share. The Saudi Basic Industries Corporation (SABIC) owns 50.1% of this company, while the private and public sectors own the remaining 49.9%.
The kingdom’s eighth-largest listed company (SABIC) for agri-nutrients gained 2.5 percent on a share price of 172 Saudi riyals, offering the highest dividend policy since 2015 this year. The petrochemical company’s payments also jumped 113 percent year-on-year, to 4.25 Saudi riyals per share.
Riyad Bank share
Riyad Bank is one of the largest financial institutions in the Kingdom of Saudi Arabia, ranking fourth in terms of assets. This bank was established in 1957 and the Saudi government owns 51% of its shares. Riyad Bank, like other Saudi commercial banks, is subject to the supervision of the Central Bank of Saudi Arabia. In March 2018, Riyad Bank launched contactless payment wristbands, using Gemalto’s digital security solution and many other financial innovations that put it at the forefront of the industry.
Shares of The Saudi British Bank, the dividend distribution
The Saudi British Bank is a Saudi joint stock company headquartered in Riyadh in which the British banking company HSBC Holdings PLC holds a minority stake. The bank’s origins trace back to the British Bank of the Middle East, which was acquired by HSBC in 1959. In response to restrictions on foreign ownership of banks in Saudi Arabia, SABB was created in 1978 to manage HSBC’s branches and assets in the country. SABB is one of the five largest Saudi banks in terms of deposits and has more than eighty branches across the Kingdom of Saudi Arabia and one branch in London, England. In May 2018, prompted by recent changes in the Vision 2030 economic reforms, SABB announced its intention to acquire Alawwal Bank in the first merger of the Saudi banking sector in twenty years.
Summary
The companies mentioned in this article represent strong options for you to choose the best dividend stock commensurate with your vision and financial ambitions. This group of companies includes four energy and materials giants, four banks, a utility provider, and a relatively steady operating telecom company with a collective market capitalization in excess of $2 trillion.
Despite moderate dividend yields, most of these large companies have enjoyed long records of consistent growth and steady payouts – a good bet for risk-averse investors. Any of these stocks can be the best investment stock that pays dividends for you, but it is advised that you do your own research and obtain investment advice before making any decision.
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